Asian buyers of liquefied natural gas (LNG) are pushing for lower prices from Qatar’s new long-term supply contracts, complicating negotiations over the offtake volumes for the country’s major expansion projects, sources told Bloomberg.
Qatar is undertaking a massive expansion to increase its LNG export capacity by 85% by 2030. QatarEnergy, the state-run company, is moving forward with the North Field West project after finding “huge additional gas quantities” at the world’s largest natural gas field, which it shares with Iran.
As the world’s second-largest LNG exporter, Qatar has recently signed long-term agreements, some spanning 27 years, to supply LNG to countries across Europe and Asia, including Italy, France, the Netherlands, and China.
However, Qatar typically sells its LNG under long-term contracts linked to Brent Crude prices and insists on specific delivery ports. But China and India, two of the largest LNG buyers, are seeking cheaper long-term deals with more flexibility in delivery destinations. These demands are complicating negotiations.
Pakistan, another key buyer in Asia, is also looking to renegotiate its long-term LNG deal. Pakistani Petroleum Minister Musadik Malik stated earlier this month that the current agreement with Qatar is expensive, and the country intends to negotiate better terms next year.
Meanwhile, shorter-term and more flexible contracts from sellers in the United States, the UAE, and Oman are challenging Qatar’s dominance in LNG supply to North Asia, according to traders.
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